In November, real disposable income was $15,467 billion. This was the lowest level of income since the start of the pandemic in March. Income was still 3.1% higher than one year ago, but this rate of growth was just below the historic average. Of course, the month-over-month rate is likely to spike up again with another round of stimulus checks.

The annual rate of growth accelerated to 5.8%. This was the fastest rate of annual growth since December 1998. Normally, this kind of acceleration would lead to a dramatic increase in consumer spending. Instead, total consumer spending is contracting at the fastest rate since the data started in 1959. So, we have the fastest “income” growth in 35 years and the fastest contraction in consumer spending since the data started more than 60 years ago. 

Clearly, the economy is anything but normal. And, it’s unlikely that $600 stimulus checks will do much to change the current dynamic.